Question 2: (20 marks)

Suppose you are offered an internship position after your satisfactory interview performance (in Question 1). As an intern, you are asked to study about inventory problems and to prepare a material requirement plan (MRP) for a new product T which structure and other relevant data are given below:

Component/Subassembly	Number Required	Lead Time
Subassembly A	3	2 weeks
Component B	4	2 weeks
Subassembly A	Number Required	Lead Time
Component B	2	2 weeks
Component C	5	1 week

Subassembly A and Components B and C are purchased from external suppliers.

Both Components B and C are also sold to customers. A particular customer of Component B requires 140 units in week 2 and 50 units in week 5 while another customer of Component C needs 300 in week 3 and 200 in week 6. The beginning inventory of Subassembly A is 200 units, the beginning inventories of Components B and C are 600 and 100 units, respectively. There is no inventory of product T.

The Master Production Schedule (MPS) data of product T as well as the lot size, lead time, safety stock requirement and minimum order quantity for Subassembly A, Components B and C are shown in the following worksheets.

MRP worksheet

MPS Data for product T						Lead Time: 1 week
Week number	1	2	3	4	5		6	7	8
Gross Requirements					90		80		20
Planned order releases				90	80			20

Subassembly A							Lot size:				100
Minimum order quantity:		200	units				Lead time:				2		weeks
Immediate Parent(s):							Safety stock:				100		units
Week number			1	2		3		4	5	6		7		8
Gross Requirements
Scheduled Receipts
Projected on hand		200
Net Requirements
Planned order receipts
Planned order releases

1. Determine the planned order releases for Subassembly A. Present your answer with the following table in your Answer File and the whole worksheet showing the steps.

Week number			1	2	3	4	5	6	7	8
Planned order releases

(3 marks)

Answer Here: